VZCZCXYZ0009
RR RUEHWEB

DE RUEHZP #1898/01 3542300
ZNY CCCCC ZZH
R 202300Z DEC 07
FM AMEMBASSY PANAMA
TO RUEHC/DEPT OF INTERIOR WASHDC
RUEHC/SECSTATE WASHDC 1579
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUEHSJ/AMEMBASSY SAN JOSE 1922
RUEHC/USAID WASHDC
RUEAIIA/CIA WASHDC
RHMFISS/COMDT COGARD WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHDC
RULSDMK/DEPT OF TRANSPORTATION WASHDC
RHEFDIA/DIA WASHDC
RHEFHLC/HOMELAND SECURITY CENTER WASHINGTON DC
RUMIAAA/HQ USSOUTHCOM MIAMI FL
RHMFISS/JOINT STAFF WASHINGTON DC
RUEKJCS/SECDEF WASHDC
RUENAAA/SECNAV WASHDC

C O N F I D E N T I A L PANAMA 001898 
 
SIPDIS 
 
SIPDIS 
 
FOR STATE WHA/CEN - TELLO 
FOR EMB SAN JOSE: OFDA - T. CALLAGHAN 
 
E.O. 12958: DECL: 12/21/2017 
TAGS: SENV AMER EWWT ELTN TPHY PM
SUBJECT: POTENTIAL SEISMIC RISKS MAY THREATEN PANAMA CANAL 
AND CENTRAL PANAMA 
 
Classified By: Ambassador William A. Eaton by reasons 1.4 (b) 
and (d) 
 
¶1. (C) SUMMARY. The historical view that Panama does not 
experience earthquakes was wrong, geological experts employed 
by the Panama Canal Authority (ACP) told EmbOffs.  These 
experts said emerging geologic research suggests that Central 
Panama -- including the Panama Canal and Panama City area -- 
may face much greater seismic risks than previously believed. 
 They believed a major earthquake (magnitude 7.0 or greater) 
could hit the Panama Canal and Panama City area at any time. 
They fear this could cause a failure of the existing canal 
and significant destruction in Panama City.  They said the 
ACP worked to address the findings responsibly.  The 
information could be made public in January 2008 to bidders 
on the design/build contract for the canal's new set of locks 
and water recycling basins.   This new information could 
significantly increase the project's costs. If true, the new 
seismic findings could affect U.S. interests regarding safety 
of American citizens in Panama, disaster relief planning, and 
our economic and security interests in the canal.  Disclosure 
of significant seismic risks in Central Panama could deal a 
huge blow to the two main motors of Panama's economy: the 
Panama Canal and the country's boming real 
estate/construction sector.  This disclosure could also 
undermine the ACP's and GOP's credibility and vindicate those 
who feared cost overruns on the canal expansion project. 
Post requests that the U.S. Geological Survey engage with 
these experts to assess the findings and advise Post along 
with other USG agencies as to the risks involved.  END 
SUMMARY. 
 
--------------------------------------------- ------------ 
Central Panama's Seismic Risks May Be Worse than Believed 
--------------------------------------------- ------------ 
 
¶2. (C) On November 21, Jonathan Harris, a geologist and Vice 
President of CH2M Hill, the canal expansion project's project 
manager, told Econoffs that emerging geologic research 
suggested that Central Panama faced much greater seismic 
risks than previously believed.  He said the area is 
vulnerable to earthquakes of magnitude 7.0 or greater and up 
to 8.0.   He said recent geological studies by 
California-based Earth Consultants International, Inc. (ECI) 
confirmed the existence of various active earthquake faults 
within the Panama Canal area.  Harris noted that CH2M Hill 
prohibits any of its employees working in Panama from living 
above the first floor in any building. 
 
¶3. (C) On December 14, Eldon Gath, President of ECI, 
continued Harris' revelations during a briefing for the 
Ambassador and select Country Team members on ECI,s work on 
Panama,s geology and the associated earthquake risks.  He 
said that the historical view that Central Panama does not 
experience earthquakes was wrong.  Gath explained that there 
were three major faults in the Panama Canal area: the Gatun 
Fault that ran within five kilometers of the Gatun Dam near 
the Atlantic entrance to the canal, the Pedro Miguel Fault 
that ran north-south between the Pedro Miguel and Miraflores 
locks, and the Limon Fault that ran through central Panama. 
Gath was perplexed that prior geological studies had missed 
what he maintains was &obvious8 evidence of active faults. 
He added that a fourth fault, which was previously believed 
to be inactive, actually shows evidence of being active. 
This fault traverses the location of the new set of Pacific 
entrance locks and is just west of Miraflores Locks. 
 
¶4.  (C) Gath said the most recent geological evidence puts 
Central Panama at the same level of earthquake risk as San 
Francisco, California.  He also said that the Panama City 
area has experienced three earthquakes of a magnitude 7.0 or 
greater in the last 300 hundred years.  An 1882 earthquake in 
Central Panama destroyed buildings in Panama City and sank 
the Panama railroad bed by approximately ten feet.  Harris 
and Gath pointed to the likelihood of earthquake of magnitude 
7.0 or greater in the canal area within the next 50 years. 
Gath added that the fault had been accumulating stress for 
almost 400 years at a rate of seven millimeters per year, and 
is now at approximately 2.8 meters of accumulated stress. He 
said he believes that the 1621 earthquake which destroyed 
Panama City occurred when the fault had an accumulated stress 
of three meters.  He maintained that three meters of 
accumulated stress was the maximum stress the fault could 
withstand before a major earthquake would occur. 
 
----------------- 
Potential Impacts 
----------------- 
 
¶5.  (C)  &The potential impact on Panama City will be 
catastrophic when the earthquake hits,8 said Gath, adding 
that when the stress in the Pedro Miguel fault reached its 
maximum, the resultant earthquake could destroy the lock 
doors at the Miraflores and Pedro Miguel Locks, cause the 
Miraflores Dam to fail, and result in landslides along the 
Culebra Cut.  Harris and Gath both said Panama City,s 
high-rises could topple as a result of construction that was 
not designed for large earthquakes.  Gath also said small 
houses in poor communities between Panama City and Colon, 
typically built on weak pillars, could collapse. 
 
¶6.  (C)  Gath doubted that the aging, poorly maintained 
Bridge of the Americas spanning the Pacific entrance of the 
Panama Canal would survive such a quake.  But he was 
uncertain whether the relatively new Centenary Bridge would 
also collapse.  He maintained that the Bridge of the Americas 
was not designed to withstand any significant ground 
movement.  Gath added that ACP and private sector engineers 
had said they did not know why the bridge has not already 
collapsed given its poor, rusted condition.  In 2006, 
newspapers reported that the Bridge of the Americas was in 
need of 30 critical repairs.  To date, virtually none of 
those repairs are believed to have been made.  Gath also said 
that it was not inconceivable that an earthquake along the 
Pedro Miguel Fault could trigger an earthquake along the 
Gatun Fault, thereby damaging Gatun Dam. 
 
--------------------------------------- 
ACP Doing the Right Thing . . . So Far 
--------------------------------------- 
 
¶7.  (C)  Gath said the existing locks were not designed to 
withstand any meaningful ground movement.  He referred to the 
Canal's existing dams as massive but brittle when it came to 
surviving an earthquake.  He said it was possible to 
reinforce the three existing dams and 50 earthen dams 
surrounding Lake Gatun to withstand a serious earthquake. 
The issue would be cost and the availability of materials, 
principally clay to reinforce the dams.  However, he doubted 
the existing lock doors and chambers could be so reinforced. 
 
¶8.  (C)  Any attempt to repair the locks after an earthquake 
could be hindered by the destruction of most of Panama 
City,s infrastructure and buildings.  As of now, the GOP 
would not likely have the requisite personnel, material, and 
equipment to attend adequately and simultaneously to the 
needs of its citizenry and the repair of the canal. 
 
¶9.  (C)  Gath said that the ACP,s current design for new 
locks (with rolling gates) was problematic and potentially 
unfeasible in light of the potential earthquake risk.  He 
said the rolling gates concept was much more difficult to 
engineer to withstand an earthquake than the swinging lock 
doors currently used.  According to Gath, ACP engineers were 
re-examining the feasibility of the proposed new lock design. 
 
 
¶10.  (C)  Harris and Gath separately speculated that 
designing the new locks to withstand a 7.0-7.2 magnitude 
earthquake could double the cost of constructing the new 
locks and water recycling basins.  As reported septel, the 
ACP,s current budgeted amount for the new locks of $3.726 
billion was already in question owing to the U.S. dollar's 
slide and local inflation rates that were now running more 
than three times the annual rate that the ACP had factored 
into its original cost estimates.  In prior conversations 
with bankers at New York-based investment banks, EconOff was 
told that the ACP could easily service up to $7 to $8 billion 
of long term debt.  The ACP currently has no long term debt. 
 
¶11.  (C)  Gath stressed that the ACP had thus far handled the 
emerging &bad news8 about the faults in a highly 
professional and responsible manner.  He pointed out that, 
unlike some of his former clients in the U.S. that had 
ignored inconvenient geologic reports, the ACP had been 
exemplary in accepting the scientists, conclusions and 
working to analyze the impact of the information.  However, 
the ACP - fully occupied with major licitation processes - 
has yet to complete threat analyses, damage assessment 
surveys, or similar reports or studies.  Gath reported that 
upon hearing of ECI,s findings, ACP Administrator Alberto 
Aleman Zubieta immediately advised President Martin Torrijos 
and the ACP,s Advisory Board.  Gath added that Aleman said 
he was more concerned about the earthquake damage to Panama 
City than the Panama Canal, quoting Aleman as saying, &The 
canal is a structure. The city is people.8 
 
--------------------------------------- 
Origins of the New Geologic Conclusions 
--------------------------------------- 
 
¶12.  (C)  Gath posited that the lack of major earthquakes in 
Panama since 1879 has fostered the mistaken belief that 
Central Panama was not seismically active.  In 2005, ECI 
finalized a report for the ACP that showed the Gatun Fault 
was active.  The ACP then hired a new geological firm to 
review the work of ECI that not only confirmed the work but 
said the risk was greater.  On September 24-29, the Southern 
California Section of the American Environmentl and 
Engineering Geology (AEG) held a symposium on the earthquake 
risks and seismic activity in Panama.  ACP officials attended 
the symposium.  Abstracts of the presentations can be found 
at www.aegs.com/2007-Meeting/pdf/abstracts.pdf. 
 
¶13.  (C)  As a result of ECI,s initial work and the 
subsequent reviews, the ACP hired three seismic experts and 
invited ECI, an expert from the Western region of the U.S. 
Geologic Survey (USGS), and other experts to Panama during 
the week of December 10 to perform field work and put these 
emerging findings to further peer review.  Gath said that at 
the end of the week, all participants agreed on the 
seriousness of the earthquake risks in Central Panama.  He 
said the only point of debate concerned uncertainties 
regarding the exact dates of the prior earthquakes.  The 
geologists, report was scheduled to be finalized on December 
16 and delivered to the ACP on December 17. 
 
¶14.  (C)  Gath expects the ACP would deliver the report and 
seismic studies in January 2008 to the bidders on the new 
design/build contract in order for them to prepare adequately 
their bids.  He said ECI would publish the results of its 
findings in scientific journals and other geologists would do 
the same.  Gath said he had already fended off inquiries from 
&Science8 magazine and a science reporter for an Orange 
County, California newspaper regarding &new findings on 
Panama,s seismic hazards.8  He said that the ACP knew of 
these intentions to publish and has said the ACP had no 
problems with the geologists publishing their findings. 
 
¶15.  (C)  Gath said that Bechtel International, which leads 
the sole U.S.-led consortia biding on the design/ build 
contract, was present at the September AEG symposium sessions 
on the earthquake risks to Panama and the Panama Canal. No 
other consortia members were present at the conference. 
Harris told EconOffs that he was concerned that some 
consortia might choose not to bid after they fully analyze 
the earthquake risks due to the cost, risk, and engineering 
challenges posed. 
 
----------------------------------------- 
Potential Implications for U.S. Interests 
----------------------------------------- 
 
¶16.  (C)  The emerging scientific understanding of Central 
Panama,s seismic risks potentially has both direct and 
indirect effects on U.S. interests, namely: 
 
-- the safety and security of USG personnel at post and the 
growing number of U.S. citizens who reside and travel in 
Panama; 
 
-- inevitable calls for U.S. support for disaster relief, 
search and rescue assistance, and possibly 
recovery/reconstruction, both at the Canal and elsewhere in 
affected areas; 
 
-- potential impacts to U.S. security and commercial 
interests resulting from any long-term stoppage or extensive 
disruptions in transits through the Panama Canal, as about 
two-thirds of the Canal's 14,000 annual transits are destined 
to/from the U.S.; and, 
 
-- potential recriminations directed at the U.S. for alleged 
shortcomings in prior geologic research and/or Panama Canal 
design/construction. 
 
----------------------- 
Action Request for USGS 
----------------------- 
 
¶17.  (SBU)  Post requests that the U.S. Geological Survey 
engage with these experts to assess the findings, and advise 
Post along with other USG agencies, as to the risks involved. 
 Post will follow up accordingly with key GOP and ACP 
officials to ensure that any conclusive new findings on 
seismic risks are divulged publicly and responsibly.  Post 
will also take stock of its earthquake preparedness and, in 
coordination with the GOP, ensure that the American citizens 
in Panama will be duly informed of Panama's seismic risks. 
 
EATON